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Assume for a moment that I just gave you a business and today is
the eighth of the month. Monthly sales so far total
$65,000.

Are you having a good month? You probably can't answer this
because you don't know the details of the business. However, I've
found that when I ask entrepreneurs this same question about
their own business, they don't have an answer.

Let's revisit our hypothetical company once more. If sales are
$65,000 on the eighth of the month, you're averaging $8,125 per
day. This means you're on track to generate $243,750 in sales for
the month.

Go back to your own business for a moment. Are you making this
calculation on a daily basis? And if so, are you comparing this
to last month's results? How about the same month last year? Are
you doing better, or worse?

Most entrepreneurs don't know these details. Yet if you start to
track and understand the numbers in your business, you can
quickly increase your sales and profits.

Below are five ways that tracking your numbers will benefit your
business:

1. Know how far you are from reaching your
goals.
Scores of research prove that individuals and organizations who
set goals are much more likely to achieve them. However, to
achieve a goal, you must be able to properly measure your
progress. By understanding how your business is doing in both
revenues and profits daily, you can tell if you're on track to
achieving your goals and adjust your plans as needed if you're
not.

2. Pinpoint and manage key underlying
issues.
There are a handful of smaller activities that effect larger
results. For example, the following are often key underlying
issues for sales:

Number of outbound sales calls

Number of live connections

Number of proposals given

Proposal close rate

Average price per sale

When sales are low, most entrepreneurs don't know what to fix to
see improvement. By tracking each of these numbers, you can
instantly know what to fix.

3. Discover problems before it's too late.
Most entrepreneurs have a bad sales month, then look back to
determine what caused it. Had the entrepreneur tracked his
numbers on the underlying issues, he could have fixed the problem
early on. For example, he might have learned that the number of
proposals issued in the first week of the month was low, and made
sure more proposals went out the door.

4. Quantify success and failure.
By understanding and tracking your numbers, you can measure
whether your business is performing well. For example, if your
sales team made 500 outbound calls already, your number of
customer complaints is less than 10, and your average delivery
time is less than seven days, you can rest assured that your
business is running smoothly.

5. Offer employees more constructive
feedback.
Tracking and publishing your numbers tells employees what's
important. For example, if you track customer satisfaction,
number of refunds, and average customer hold times, your customer
service manager knows precisely how he is being judged and what
to improve.

Keep in mind: Don't just look at your numbers to determine what
needs fixing. Use them to pinpoint what's working well in your
business and do more of that.